To sell, or not to sell?
Is this a good time to sell collectible instruments and bows due to the stock markets rapid decline? Or, the opposite? I think that I have read that violins pretty much kept their value during the Great Depression, but I am not an expert so do not know.
My question to you would be, who has the money right now to buy such an instrument? Every working musician that I know of is hurting. I have personally lost at least two thousand dollars of upcoming expected income and that does not include any possible future disruption to my SAS salary.
Probably not at this moment.
Not being an expert has never stopped me from answering. Violins seem like a particularly illiquid commodity. Good luck selling in the best of times, but add quarantines in and you've eliminated the buyers that are going to be testing them out - Or do you really want to be shipping stuff around right now? And then add people's financial fears and uncertainties, and you are looking at a market without many buyers. So if you really need the cash soon, and press forward and want to sell in this kind of financial market, because of the lack of demand, you may have to take a big hit. Does that mean that your instrument has really depreciated? I wouldn't think so, but I don't know how the economists would see that.
There is a "cash crunch " happening. Even bonds are selling off.
In times like these, the big money boys (think Mr. Potter from It's a Wonderful Life) are buying assets for pennies on the dollar from people who need to raise cash. If you don't need to raise cash to pay your bills, don't sell your precious assets to Mr. Potter!
A lot of money is moving out of the stock market. Interest rate being so low, there is no good place to go. Bonds? Gold? real estate? There are no good options.
It is an illiquid asset, and there are certainly going to be distressed sellers.
I wouldn’t sell right now unless it was an absolute necessity. I don’t know what the prices at name auctions like Tarisio will do but looking at the mid to upper range of eBay, say $1500 to $15000, it seems prices are down about 25%
It’s a buyer’s market right now. Shops are closed all over the place and makers are hit hard, especially in Italy. With people worried about going out, it’s difficult for sellers to make sales, and that’s not counting the people in places that are under shelter-in-place orders.
A frequent poster here, who is a renowned violin maker too, mentioned a few days ago that he had some cancellations from his client wait list.
Honestly, there's been a slowly expanding bubble in the violin world going on for a while now. It's got to pop at some point. I mean 20 years ago, I could get a professional grade violin for around 10-20k. Now? 50k or more. But wages for musicians have been stagnant, or even less. Fewer buyers + inflated price is an unsustainable place to be if you're holding onto an asset.
Maybe I can sneak a visit to my violin shop and get a steal...
I was seriously considering pulling money out of the stock market and parking it in a great bow. My timing was off. Market crashed faster and harder than I could manage it.
I'd consider it, Bruce. If there's one thing investors universally hate, it's cash. They want the companies they invest in to have cash, but they loathe it as part of their own portfolios. Mutual funds tout the fact that they're fully invested. I'm grateful that my approach is balanced -- I have my retirement in equity funds, but a significant portion of our family savings is in CDs. 2% is looking pretty damned good these days.
Maybe you should invest in funeral parlours.
I would only sell if i were completely broke and there's no other way to get money.
Gordon that's a morbid joke, but the grim fact is that the big brokerage firms are busting their butts to find investment strategies that might profit from doom. The problem is that most of the firms that might be in the black don't have enough capitalization. You just can't buy enough shares of Medtronic to make up for all the GE, Ford, and GM that you're trying to dump. Even 3M -- the leading maker of N95 masks -- is way down because that's a company with a very diverse product line.
Clorox (NYSE:CLX) is doing great. Just saying.
Where to invest your money in times of hardship? Not a problem that many in the music game suffer from over here.
It might be a good time to sell in the short term if inflation starts to kick in later due to additional stimulus spending from central banks in the US and Europe. If investors cannot counter the inflationary effects through increased returns on stocks or real estate, then you could see a global economic recession, and perhaps a prolonged one since some central banks (US, Germany) cannot cut short term rates much further at this point in time to help stimulate the economy.
Although I don’t think value for violins will drop because of the current conditions, I do believe that demand will be lower for a while. Much of this is because it’s simply harder to visit shops and auction houses with travel restrictions in place. Out of desperation, some are already selling instruments below value. Those who aren’t desperate to sell can afford to ask regular prices.
To buy or sell is a matter completely up to the owner. Right now musicians that have lost jobs or have had canceled seasons won't be looking to buy, I've had some returns happen when the shelters in place order were announced.
You sell, and when the prices are low enough, I'll buy.
I’ve got 2 bottles of hand sanitizer and a family pack of toilet paper.:)
Best to do what I have done and put your violin buying and selling on hold until we weather this storm and come out the other side, certainly I would not do anything to risk more exposure to the virus in the interest of buying or selling what in this economy are non essential items!!
i actually put all my next violin money into the stock market last week when the market was near bottom. pretty sure you are not going to get your asking price if you decide to sell now.
@Andrew, it's interesting that you bring up the Titian Strad.
There have been a few investment funds promoted to buy violins for financial gains. The studies they use are often very selective in the data chosen.
Kyle wrote, "...last week when the market was near bottom."
I would predict the market will go much lower
Now there’s a bet we can track!
I have heard it from a dealer that prices are going lower right now on fine violins and bows. Whether this is due to the sellers desperate for cash selling off collectors instruments or dealers hurting for business is not something I can answer.
"prices are going lower right now on fine violins and bows"